MulticalcDSCR Calculator
Enter your details and click "Calculate" to see your DSCR.
Key Features
Instant Assessment
Immediately determine if cash flow is sufficient to cover debt.
Lender Standard
Uses the same metric banks use for commercial loan approval.
Interpreting Your DSCR
| DSCR Value | Status | Meaning |
|---|---|---|
| < 1.0 | Negative Cash Flow | Income is insufficient to pay debt. |
| 1.0 - 1.2 | Break Even / Risky | Little room for error. Lenders may avoid. |
| > 1.25 | Healthy | Standard minimum for most lenders. |
| > 1.5 | Strong | Excellent cash flow buffer. |
Calculation Formula
DSCR = Net Operating Income (NOI) ÷ Total Debt Service
Where:
- NOI: Revenue minus operating expenses (excluding taxes & interest).
- Debt Service: Total principal and interest payments for the period.
Frequently Asked Questions
Generally, a DSCR of 1.25 or higher is considered good and is often the
requirement for commercial loans.
Yes. A higher DSCR typically signifies lower risk, which can help borrowers qualify for
lower interest rates and better loan terms.
Quick Tips
- Verify NOI: Ensure all operating expenses are accounted for (insurance, maintenance, etc.).
- Stress Test: improving NOI is the best way to improve DSCR.
- Include Leases: Don't forget equipment leases in debt service.